Mo' money —

Desperate to become a wireless broadband player, Dish ups bid for Clearwire

Satellite TV company in a bidding war with Sprint.

Folks, we’re in a good old-fashioned bidding war! Dish has now upped its own bid for Clearwire to $4.40 per share, $1.00 per share more than Sprint’s current offer of $3.40 per share—and noticeably higher than Dish’s own previous offer of $3.30. Both companies are after Clearwire’s significant spectrum holdings. Dish’s new bid, at present valuation, is worth around $6.5 billion.

As we’ve noted previously, Dish is currently trying to acquire more spectrum to be used for its LTE-Advanced network, which would launch in 2016. That news came in October 2012, after the company abandoned plans to use its spectrum to re-launch Blockbuster Video as an online movie streaming service.

"[This offer is] about the value and scarcity of spectrum, of which Clearwire has—relatively speaking—an abundance," Charles Golvin, a Forrester analyst, told Ars. "Given its puny customer base and far-from-complete buildout, spectrum is the only real asset that Clearwire has. Dish isn't solely angling to enter the mobility space; it aims to be a national triple- or quad-play alternative, and to be able to provide a viable home broadband component of that package it needs as much spectrum as possible."

Clearwire’s stock price has jumped 21 percent since the market opened on Thursday. With Clearwire’s stockholders meeting set for May 31 (tomorrow), shareholders are going to have to decide quickly which suitor they want to go with—except that Bloomberg News, citing an anonymous source, reports the meeting has been postponed.

“The special committee of Clearwire’s board of directors has received Dish network’s offer and will review it to determine the best course of action for the company and its stockholders,” Mike DiGioia, a Clearwire spokesman, said in a statement to Bloomberg. “The special committee has not made any determination to change its recommendation of the current Sprint transaction.”

Let’s recap: in October 2012, Sprint acquired a controlling stake in the struggling Clearwire. By December 2012, Sprint attempted to acquire the rest of Clearwire that it didn’t already own. In January 2013, Dish came out of the woodwork with its own bid. Then, in April, Dish decided to bid to acquire Sprint-Nextel (and Clearwire, presumably) entirely. (If you’re keeping score at home, Dish’s bid to acquire Sprint was also meant to thwart the October 2012 merger with Japan’s Softbank, a deal that has not yet closed.)

“We are confident that this offer is clearly superior to the proposed Sprint merger,” wrote Charlie Ergen, Dish’s chairman, in a statement late Wednesday. “It offers substantially greater value to Clearwire and your minority stockholders and a clearer path to value realization for all parties. Importantly, it also provides a meaningful alternative to the significant group of your minority stockholders that remain opposed to the Sprint merger.”

Grab your popcorn—this isn't over yet.

Cyrus Farivar
Cyrus is the Senior Business Editor at Ars Technica, and is also a radio producer and author. His latest book, Habeas Data, about the legal cases over the last 50 years that have had an outsized impact on surveillance and privacy law in America, is due out in May 2018 from Melville House. Emailcyrus.farivar@arstechnica.com//Twitter@cfarivar

12 Reader Comments

So, to sum things up, this will never go through, as Sprint, the majority shareholder, can vote against it and the Dish offer is defeated. Of course, the minority shareholders can then reject the Sprint offer as well, but where does that leave them?